AI RAM raid

The price of computer RAM has doubled. Three major manufacturers control over 90% of the market.

Investors continue to assess the growth potential of artificial intelligence or AI.

This has driven the explosive growth in data centre construction and the need for greater electricity generation to power them. However, in a classic  ‘law of unintended consequences’, the surge in demand for high-end bandwidth computer memory chips that AI requires has driven up the price of RAM.

RAM – Random-access memory, is used to store computer code while you use an electronic device. It is a critical component of almost every computer as well as smartphones, smart TVs and medical devices. There are three major manufacturers that control over 90% of the market – Samsung Electronics, SK Hynix, and Micron Technology. The price of RAM has more than doubled since October 2025, which has been exacerbated by Micron, one of the biggest sellers of RAM, which recently announced that it would stop selling its Crucial RAM brand to focus on AI demand.

Ultimately, this is further bad news for consumers.

In PCs, memory typically accounts for between 15%-20% of the total cost, but current pricing has pushed this up to between 30%-40%. Profit margins for computer consumer goods are not high enough to absorb this scale of cost increase and as a result, sector specialists are warning that consumers could face potential price increases in 2026 for laptop computers and smartphones. The alternative for consumers unwilling to pay higher prices may be to accept a compromise in a lower performing device.

There is no doubt that AI will be transformational, but questions remain about the sheer scale of investment currently underway and the eventual returns on that investment. Similarly, questions remain over the economic impact of AI. The massive investment underway building new AI data centres and nuclear generation to power them is contributing to economic growth. Productivity is expected to receive a boost but against this there will be inevitable job losses.

While AI will help all of us, unfortunately, in the near term, it means we might have to pay more for our electronic goods.

 

What have we been watching?             

 

Another rollercoaster week and 2026 is only four weeks old! There was a sell-off in gold and silver and some other commodities after the recent spike to record highs, while Brent oil has fallen sharply this morning on news that Washington is in talks with Tehran. This follows Trump’s earlier comment that the ‘next US attack would be far worse’ than the strikes last June if Iran did not reach a deal.

 

Never one to miss the opportunity to take the credit, Trump announced that ‘America is back’ as the S&P 500 index hit 7,000 for the first time ever. However, the US Dollar remained weak and there is another partial US government shutdown, albeit not as severe as the record one at the end of 2025.  The US Federal Reserve (Fed) held interest rates steady at 3.5%-3.75% with Fed Chair Jerome Powell offering little short-term guidance but suggesting that the next interest rate move is still likely to be a cut. Then at the end of last week, there was a steepening of the US bond yield curve on news that Kevin Warsh had secured the nomination for new Fed Chair. He is known to be more ‘hawkish’ on the Fed’s balance sheet than other candidates, which also helped support the US Dollar.

 

The yen rallied slightly after the recent sell-off as Japan’s finance minister said the government will work with the US on currency responses when necessary but would not be drawn to comment specifically when asked if the authorities conducted currency interventions.

 

China’s official PMI business activity indicator for January drifted back from 50.1 to 49.3. This was below expectations and is the ninth decline in activity in the last ten months. The service sector PMI dropped from 50.2 to 49.4, reflecting weak post-holiday demand. Meanwhile, there were reports that 20 Chinese provinces were lowering their economic growth targets for 2026, suggesting that we might see Beijing lower its official growth forecast from 5% to 4.5%-5% later this year.

Read our latest investment insights from Alpha PM

 

Brent oil surged to almost $71 on fears of a US attack on Iran but has fallen back this morning to $66 on indications of talks between Washington and Iran.

Finally, there is nothing quite like an investment rumour! Amongst the latest is a report that suggests quantum computing may be able to break the Elliptic Curve Digital Signature Algorithm, which secures Bitcoin wallets, enabling hackers to run off with cryptocurrency! If this proves to be true, then one analyst estimates that between 20%-50% of Bitcoins may be vulnerable to future quantum computing attacks, particularly those held in older wallets.

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